Barb Dybwad of Engadget has created an How-To article on turning the Mac mini to a low-cost recording studio. It basically involves using GarageBand v2 (part of iLife '05 bundled with the Mac mini), iMic from Griffiin, a microphone, earphones, and some instruments.The article also runs through the basics on setting up GarageBand and version 2's new feature to record up to eight tracks at the same time.

From Article "So we know that everybody, their sister and their cousin, too are working on how to use the Mac mini in a home theater setup (we are not immune!). But better yet - one thing you can just never teach your TiVo is how to be a music production station. Gone are the days of needing hundreds of thousands of dollars to set up a studio to produce your own tracks; a decent digital audio workstation can now be set up for comparatively ridiculously low cost." We highly recommend this article!